When you arrive at Lakewest, Fitcher will hand over a Reference special item and go on ahead to Two River before you. Tai Ho/Amada will also leave your convoy and stay here with the boat. If you want to add them back to your party, you can return to the Castle and add them like normal. Lakewest is a very small town, but has several secrets in it. First, if you have Clive in your party, you can talk to the guy near the counter at the inn here and he will have a message from Elza for Clive. That is, if you have met the time requirement. Clive's quest is entirely time-driven, and if you are over 11 hours into the game, the quest will end here. Not to worry, you gain nothing from this quest other than learning more about Clive and Elza's past and getting a different ending message for Clive. In the item store, the Fish Badge is a good accessory, but is only able to be equipped by young characters. It gives a slight chance to null magic attacks.
Right off the boat, search the basket of vegetables to obtain the excellent Kindness Rune. This rune, attached to a weapon, grows in power the longer the character is in your party. It uses a kind of hidden "points" system to determine how much of an attack boost the character gets. You gain points by having a character in your party for a specific amount of time, but lose them if the character is dead at the end of a battle. Points are also awarded if you give a stat-stone to a character. Naturally, this rune is made for Riou, however, this can be useful for any of your favorite characters you plan to use throughout the entire game.
In between the first two houses, opposite the shoreline, search the barrel in between for a Cabbage Seed. This is a Castle item that will come into play later on; for now, just stash it in the warehouse.
The house in the northwest part of town contains a missable item. Search the shelf hanging on the wall to receive Recipe #16. If you do not grab this item before you recruit the character in the house, it is lost forever.
After you have the recipe, talk with Taki here several times and she will agree to join your party. At your Castle, she works similar to Onil from the original Suikoden. She will give you elderly life advice as well as where you need to go to advance the storyline.
Okay...sure thing, man. Ignore this a-hole and let's look at the enemies out on the world map.
This formation may look familiar if you were hunting for potch earlier in the game. Like the one back at the Muse-Highland Border, the Sandilio here will drop a large amount of potch when defeated. Double it up with a Technique Rune, if you like.
The Rockadillo enemies will drop the Turtle Plans #1 rather commonly. This is another Castle item that will be used later on in the game and you cannot acquire it any other way.
Spikebeak enemies will rarely drop the Balance Rune. This is the only place in the game you can get this rune. When attached, it renders the unbalanced status effect null. This is only really useful when attached to a character whom succumbs to the status from using another rune or a unite attack. For example, you can apply this to Nanami to keep her from becoming unbalanced from her and Riou's Family Attack. That's it for rare items on the world map. You can venture south from Lakewest to find the Kobold Village, and even further south for Drakemouth Village. There is nothing to do in Drakemouth, however, let's go ahead and enter Kobold Village.
At the item shop in Kobold Village, we have two rare items that can show up in the rare finds. The first is Recipe #31, and the other is the Gold Emblem accessory. While only being able to be equipped by human males, the Gold Emblem is the best accessory in the game for improving a character's magic defense. This is the only place in the game this accessory will show up, so make sure to check back often to outfit those low magic defense characters.
Just outside the Chief's house, search the large mortar for the Exertion Rune. Another fantastic weapon rune, this rune grows in attack power the longer the battle progresses. Each turn, the character will receive an attack boost when they have it attached to their weapon. One of the absolute best in the game, unfortunately, this is the only one you can freely move around to characters.
Inside the Chief's house now, talk to the kobold near the stove to obtain Recipe #13. We're loading up on these, aren't we? They will be of use here very shortly. For now, let's continue the story over in Two River; to the west of Lakewest.
When you arrive in Two River, a winger kid will bump into the party; thieving all your potch and your letter of Reference. You won't be able to get in to meet the head of Two River without it. First, head to the top floor of the inn and talk to one of the patrons here, Hans. Invite him to open an armor shop at your castle and he will join your party. Make sure to invite him with no payment. If you ask for potch, he will eventually pay you, but will not join your party until later on in the game.
For now, we have to track down that kid over in the winger district of the city. You'll encounter him at the entrance, and you'll need to chase him around the district until he eventually flies away; revealing he already threw away your Reference.
Do these kind of fish-heads increase your INT too?
I thought an Adult Mag was gonna jump out and attack me from this bookcase. Maybe you need a Guitar?
??? Anyway, that's enough strangeness in the winger district, exit to the north and into the kobold district.
If you're like me, you want to recruit every character you can, as soon as possible. At the kobold section's item store, you need to buy a round of Fried Tacos. Obviously, you have no potch at the moment, but you should have at least one item in your inventory you can sell; these are extremely cheap. Also note, until we get our potch back, I won't be covering the rest of the shops just yet. For now, head back over to the human district.
When you enter the human district again, you will see Fitcher about to get a lashing from a kobold leader, Ridley. You can interject and spare Fitcher, or you can watch him take the beating; your choice. Riou will then present the evidence of who he is to Ridley via his Bright Shield rune and you will be invited inside. Before that, with those Fried Tacos in hand, exit back to the world map and over to Lakewest.
Save your game, then use the Fried Tacos item on Riou until he obtains the "Toasty" status, which, you can see in the above picture, is a plume of steam around Riou's head. Simply reset your game if you use all of them to no effect.
Tetsu lives in the middle house in the north of town. Talk with him in the "Toasty" status and he will offer to join and build a bath for your Castle. Now, we can return to Two River and enter the assembly hall.
Inside, we will be introduce to Makai, the plenipotentiary of Two River. He would like to form an alliance with your army and will ask about the incident with the winger boy stealing your potch. Looks like there is already a bit of bad blood between the races here...Afterwards, make your way to the inn to stay and you will again, encounter the winger boy, Chaco, whom asks if you're truly the leader of your army.
In the morning, it seems like trouble is brewing between the humans and kobolds now. Head back to the assembly hall to witness Makai and Ridley's bickering over the Highland Army's advance on the city and a perceived selling out of the kobolds to them. After Ridley storms off, follow him back to the kobold district to find that it has been locked down and you cannot enter. When you enter back to the winger district, Chaco will appear again and this time lift Fitcher's wallet. Chase him around town once more until he escapes down into the sewers. Time for our next dungeon.
These sewers, while fairly short and linear, contain several monsters with rare items. The Landshark enemy will drop Recipe #21. This is one of the notorious five bugged recipes in the game that need to be payed close attention to or it can permanently prevent you from getting other recipes. Once you have this Recipe, place it into your warehouse and NEVER give it to your Castle's restaurant when it opens. All five of the bugged recipes have to be given over at the same time to prevent the bug from occurring. Don't worry, I will be mentioning this often to help you remember.
Shadows will very rarely drop the Mangosh. In the previous game, the Mangosh was a fantastic accessory, in Suikoden II, and future Suikodens, it is a shield. While lacking in defense compared to other late-game shields, the increase in counterattacks that the Mangosh provides make it a viable option. You'll eventually be able to find this shield easier in a town's rare finds later on, but this is your first chance to obtain it.
The Sirens of the area contain two very rare items. The first being the Banshee Rune. This is, yet another, novelty rune with little use but to obtain it for completion. Basically, this rune allows you to pilfer HP from another party member to restore your own. Terrible; there are a million better ways to restore HP than this thing. Sirens are the only place in the game you can find this rune.
Thankfully, the Sirens also hold a very valuable accessory: the Water Amulet. Don't be fooled by its low defense, this accessory grants a 5% chance to resist a magic attack and all characters can equip it. Any character can benefit from this accessory, especially those with low magic defense. This is the only place in the game you can find this accessory as well. Always keep it in mind when outfitting your characters. Now, let's continue on through the sewers.
Among the treasure chest in the area, there are three of note. You'll find a Resurrection Rune at the beginning of the dungeon. You'll be able to buy these soon enough, but this is the first you will find. I highly recommend giving this to Riou. Later on in the dungeon, you will come across two chests at the end of a bridge. One contains a Fire Emblem, one of the best accessories in the game, but will be purchasable later on, and a Stone of Defense; of which this should be your second of only four in the game. I'll talk about the Fire Emblem when we get to the shop it is located, but for now, I recommend this for any non-mage character.
At the end of the sewers, you will reach a save point, and then a boss: the Pest Rat. The only thing that makes him a viable boss is his chance to inflict poison upon the entire party. Use the Water Rune's Protect Mist at the beginning of the battle for a chance to reflect this, and then Kindness Drops for single party members that are poisoned, or Kindness Rain to effect the entire party. Other than poison, he will charge twice at a front-line character, just dealing moderate damage.
When defeated, the Pest Rat will drop the Poison Rune. When attach to a weapon, it has a chance to inflict the poison status effect on an enemy. While only a decent option, this rune is noteworthy as there are only four of these runes in the game.
Climb the ladder shortly after the boss fight to find yourself in the kobold district of Two River. You will be confronted by Ridley who explains that a secret peace treaty is taking place with Highland and the kobold section is being turned over to Highland control in the exchange. When Ridley ejects you from the district, head back over to the human district to witness a meeting between Makai and the Highland general, Kiba. Afterwards, enter the assembly hall once again to talk it over with Makai. He is adamant that the Highlands only want peace and rescinds his offer to join your army against Highland.
Back outside, Chaco will invite you to visit his grandmother in the winger district. While your destination is to stay at the inn, if you don't go and visit his grandmother, you will be unable to obtain a one-of-a-kind item later on.
You will meet Susu, the elder of the winger district inside. She will share some of the winger's history with you as well as about Genkaku. After the scene, Chaco will still refuse to return your potch, so just return to the inn for now.
The next morning, Highland will already have broken the treaty at the gates to the city. Fighting will break out and your party will have to engaged a group of Highland soldiers. You can opt to fight some more soldiers if you choose the option "We can't give up", but to advance the story you will have to return to the kobold district to seek Ridley's help. Ridley will initially refuse, but once the wingers join the battle, the kobolds will follow suit and help route Highland from Two River.
The scene will switch to the Highland camp where the occupation of Greenhill will be planned. This will be the first time since the betrayal that Jowy will be seen and he will take command of the Greenhill campaign. It looks like there is more trouble afoot...
The next day, all three races of Two River will agree to join with Riou's army to battle Highland. Fitcher, Ridley, and then, Chaco, at the city gates, whom also returns your money, will all join your party. A very minor note, but Chaco comes equipped with a Sun Badge that he normally cannot equip. Just be aware that if you remove it, you will be unable to equip it again. Now, before we return to the Castle to start the next chapter, let's take a look at the shops now that we have our potch back.
In the human district's rare finds, we can pick up Recipe #23. Also, at the winger section's item shop, you can occasionally find the Wing Ornament accessory. This is an outstanding accessory for the two winger characters that join your party in the game, but you will eventually be able to purchase this normally and I will cover it there.
Lastly, you will sometimes find the Wizard and Warrior Runes at the human district's rune shop rare finds. This is the only place in the game you can find both of these runes. These can be useful, but risky. The Warrior Rune will increase your attack power by half the amount of your physical defense, but your defense is also lowered by that amount. The Wizard Rune does the same, but for magic and magic defense instead. The Warrior Rune's usage is essentially nulled by the the much-more useful Double-strike Rune you will find in the next chapter.
The final thing to do in this chapter is to return and talk to Chaco's grandmother, Susu. If you spoke with her earlier when Chaco asked you too, she will give you a Spinach Seedling. If you neglected to visit her, then you will be unable to obtain this item and cannot complete your Castle's garden. When your business in Two River is finished, return to your Castle to continue the story.